Trading posts do NOT supply armies. Only colonies are sources of supply. Also, only colonies become ports (if on a coastal province), & colonies are just as good as trading posts at generating trade income.
There are some reasons to use trading posts: (1) you are filling up with colonists & you cannot afford to place colonies. Place a trading post somewhere & you can claim the land for your country. (2) Sometimes (especially in Asia) you will find a province that deals in a rich trade good such as spices, chinaware, or ivory, but will have negative growth if you place a colony there. You might just want to place a trade post--that way, you don't have to worry about tending it later to make up for the negative growth. (3) You have found a rich province but you can't afford to colonize right now & you have at least one colonist 'to spare.' Slap down a trading post to tag it as yours until you can afford the colonist. (4) Possible other strategic reasons, i.e., as England in my last game I built two lines of trading posts in N. America from the Atlantic to the Rockies, 1 north & 1 south, so as to block off the interior of America east of the Rockies from other European powers (or at least from other European powers that didn't want to declare war on me by entering my trading post provinces). At the stage of the game where it became possible for me to do that (i.e., late 16th/early 17th century) I had scads of colonists & could afford the trading posts, but could not afford colonies.
Generally, though, colonies are the way to go. In most places, at least, colonies will grow population, & many will give you a valuable port. More importantly, you can build them up to size 7, place a tax collector, judge, & governor, & you will have a nice money-maker.
